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Is Pyne putting a dollar figure on human life?

Mr Pyne is accused of starting a program to back the government's views on climate-change-action wars.
AAP
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A decade ago, the Howard government’s Education Minister Brendan Nelson upset academia by intervening to cancel a number of Australian Research Council grants.

It was 2004 and the minister fronted cameras to list several research topics, mainly in the humanities, that he thought offered little benefit to taxpayers, including one asking: “Where does Elvis live?”

Mr Nelson’s move was a response to complaints from conservative commentators, such as Andrew Bolt, who fumed that: “In cultural studies, seven of the eight grants were … for peek-in-your-pants researchers fixated on gender or race, and Marxists got all the grants you might expect of priests who worship state power.”

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A decade on, a different kind of power is ruffling feathers – specifically, renewable power and the government’s decision to put up $4 million to set up a research centre almost certain to argue that renewables are a waste of money.

Leading the research centre, to be hosted by the University of Western Australia, will be climate contrarian Bjorn Lomborg.

So whereas Mr Nelson was criticised for gagging academics whose research fuelled the ‘history wars’ that raged at the time, current Education Minister Christopher Pyne is being accused of starting up a program to back the government’s views on climate-change-action wars.

As his government is planning to slash the 2020 Renewable Energy Target by about a quarter from the figure set by the Rudd government (the plan is still stuck in negotiations with Labor), that’s not an unreasonable assumption.

At first blush the plan for the UWA research centre is perfectly innocent.

Former Education Minister Brendan Nelson was criticised for gagging academics.
Former Education Minister Brendan Nelson was criticised for gagging academics. Photo: AAP

Mr Lomborg will be tasked with applying an ‘economic lens’ to development issues around the world, to determine where money should flow to produce the greatest benefit for the costs involved.

But don’t expect many surprises.

Mr Lomborg’s US-based Copenhagen Consensus project (he moved it there when the Danish government stopped funding him back home) has already given some pretty strong indications of just where the future lies.

In a recent paper on energy investment, the group assessed several options:

“Double research, development and demonstration (RD&D) in energy technologies which has a benefit of $16 for every dollar spent … Provide access to modern cooking fuels to 30 per cent of the current unserved population which returns $15 for every dollar spent … Phase out fossil fuel energy subsidies which has benefits of 15 times the cost …”

However, when it comes to spending on renewable energy, Mr Lomborg’s cost-benefit approach produces this finding: “The following targets are relatively ineffective: Double the share of renewable energy in the global energy mix which would return less than a dollar for every dollar spent.”

This will please, in particular, Treasurer Joe Hockey who finds the sight of windfarms “utterly offensive” and a “blight on the landscape”.

With Mr Lomborg’s help he should be able to rest his eyes on majestic coal smoke stacks for decades to come.

The trouble is, though Mr Lomborg has a coterie of accomplished economists to back his views, many other accomplished economists see his work as a blight on the research landscape.

For instance, US economist Frank Ackerman or Tufts University thinks the cost-benefit approach used by Mr Lomborg’s research centre is deeply flawed.

In a recent paper he argued that:

Cost-benefit analysis … makes the seemingly innocuous assumption that policies should only be adopted if the benefits exceed the costs. This comparison, however, is only appropriate if both costs and benefits can be fully quantified and meaningfully expressed in monetary terms – and that is rarely the case in health and environmental policy.

Typically, the costs of environmental protection are largely or entirely monetary, while the benefits include such priceless values as protection of life, health, endangered species and unique ecosystems, and the rights and needs of future generations.

Economists who are committed to cost-benefit analysis have invented surrogate prices for many priceless health and environmental values, but both the methodology and the results of this process are problematic.

Put another way, the benefits of averting severe anthropogenic climate change could utterly dwarf the costs of developing low- or no-carbon power sources. It is the risk of that future that is being mitigated via decarbonisation, not the certainty.

The world is falling behind on the investment needed to limit global warming to two degrees celsius (see chart below), and the advice Mr Lomborg’s centre is likely to provide the Abbott government could end up being just another brake on that investment process.

investment

On the other hand, many of the overseas aid objectives the centre highlights will be perfectly valid – and important to focus on, given the dramatically slashed foreign aid budget.

But if the centre’s finding are cynically used to justify slowing Australia’s already tardy response to a de-carbonising world, the money would have been far better spent on something useful.

I mean, the money could be used to find out not only where Elvis lives, but how Julia Gillard’s ‘wrecking ball’ carbon tax managed to swing through the economy for over a year without hitting anything.

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